NCPA - National Center for Policy Analysis


October 6, 2006

U.S. Sen. Harry Reid (D-Nevada) and Rep. Jim Matheson (D-Utah) have proposed legislation requiring federal taxpayers to subsidize $300 million in renewable energy equipment purchases in six western states.  The bill aims to induce schools in the affected states to purchase expensive renewable energy equipment by making federal taxpayers pick up the tab, says the Heritage Foundation.

Under the terms of the bill:

  • Some $300 million in interest-free bonds would be offered to schools in the six states to purchase renewable energy equipment.
  • The schools would not have to make any payments on the bonds for 20 years but would have to pay them off in full at that time.

Reid and Matheson are framing the bill as a way to lower costs and help put more money toward education.  But because schools already purchase energy from conventional power sources -- which is significantly less expensive -- their motives are being questioned.

Analysts suggest that if the Congressmen are truly concerned first and foremost about education, they would be more effective by simply giving schools $300 million in grants rather than making them spend it on renewable energy equipment that cannot financially compete against conventional power sources.

Source: James M. Taylor, "Taxpayers Asked to Subsidize Renewable Boondoggle," Environment and Climate News, October 2006.


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